Salary Sacrifice

Salary Sacrifice

Salary sacrifice is a tax-efficient agreement between you and your employer, where you agree to give up an amount of future earnings and in exchange that amount is paid into an occupational or personal pension scheme on your behalf.

As this contribution isn't liable for Income Tax or National Insurance, you will actually receive more as a pension contribution. Added together, these savings mean more money goes into your pension plan at no extra cost to you or to your employer.

What are the benefits?

Benefits to you:

• Contributions to your pension is increased at no further cost to you
• You make Income Tax and National Insurance savings

Are there any drawbacks?

It's important to remember that part of the salary is being sacrificed and as a result any transactions based on the amount of your salary may be affected. For example:

For example:

• Mortgage borrowing
• Contribution-based state benefits such as state pension or incapacity benefit
• Working tax credit and child tax credit
• Income protection benefits
• Personal loans or credit card limits

For an initial enquiry or a comprehensive financial review please email enquiries@pennymatters.co.uk